June 11, 2017

Builder's Roundtable: A busy summer for local real estate By Andrea Stetson Express homes are hot, senior living facilities are hot and buyers are hot on the trail of searching for the best bargains no matter what their home price range. That’s what a group of panelists said this week during a Building Industry Association Sales and Marketing Council event. Dozens of realtors, builders, home designers and marketing specialists crowded into the room at Robb and Stucky in Fort Myers to hear the experts speak about the latest building and housing trends.

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The panel consisted of Rebekah MacFarlane Barney CEO of the MacFarlane Group, Jonathon Pentecost, division president of D.R. Horton, Frank Jenkins, president of Frank R. Jenkins Custom Homes and Ted Gadoury president of Gladstone Builders. Steve McQuilkin storytelling coach at The News-Press was the moderator. Summer is traditionally a slump time in the industry, but the panelists say they don’t see it that way. “With our demographic being seniors we've seen consistently that the people coming in are people that live in Fort Myers already,” said MacFarlane Barley. “Some have waited for traffic to die down. These are people who live in our backyard. The difference between season and summer is less calls, but more qualified buyers. The people that are calling are depositing. That is the shift we are seeing.” Gadoury said people will be seeing a lot of commercial construction this summer, but that does not mean new deals. He said it is because commercial projects take longer in the permitting and planning stages so projects that were conceived a year ago are just getting started. “It looks like on every corner dirt is being turned,” Gadoury said. “Most of those projects have been in planning and permitting for more than a year. Summer will be very busy. A lot of stuff is coming out of the ground. The beginning of year was not very busy, but the backlog is coming in now so we will be very busy.” Pentecost said he sees a trend where buyers are looking to cut costs and find the biggest bang for their buck whether they are buying homes for $200,000 or millions. “If it is a $500,000 to $700,000 community people are buying the $501,000 house,” he said. “They are buying the least expensive in a community.” Pentecost also sees a big future for express homes that he calls his value line. Those are homes that are simple models that allow no design changes, but are priced lower than most homes. “Five years ago our president wanted to enter the luxury segment,” he began. “We went into the high-end market all over the country. That has gotten a little thin over the years. Fast forward to where is the future of the market and that is the first time buyers. You don't make a lot of money doing it, but you can sell a lot of houses because not a lot of people are doing it.” Pentecost said D.R. Horton can deliver a home for under $200,000 in some places.

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“There are no changes. We build it just as it is,” he explained. Cape Coral is one of the places D.R. Horton has been able to build low-priced homes. This year they are building 350 houses in that area. “Rents are rising and that helps our express business,” Pentecost explained. “We can put you in a three-bedroom home for $1,300 a month. We developed it for the first time buyer, but we found that 60 percent of our buyers are blue collar workers moving in from up north. That blue collar retiree is completely priced out of most places. They have a housing budget of $1,500-$1,600 a month and they want a community with some amenities. Cape Coral has that and we can deliver a home for $200,000.” Pentecost also predicts building booms to continue in other lower priced areas. “I think Lehigh is going to do well,” he said. “A lot of people who work near I-75 don't want to have to travel all the way through the Cape. Golden Gate will also do well.” Jenkins addressed the other end of the spectrum: high-end homes. For him, it’s not the price, but finding a place to build that is his biggest problem. “As far as the high-end market what I have seen is a little bit of pause in the last year and a half,” Jenkins said. The biggest problem is shortage of land. A lot of people are looking for teardowns. I look every day to find a tear down to start a spec house.” He said the best opportunities for teardowns are waterfront homes. He’s also seen teardowns in some upscale gated communities such as Bonita Bay, Pelican Bay and Miromar. “You will see it more and more because there is not that many high-end developments coming online,” he said. MacFarlane Barley addressed senior living which she said is a booming business that is undergoing big changes. “We were always good at needs,” she began. “If you break a hip we take care of it. If you have dementia we have memory care. Now we are working on the wants. We need to focus on what people want.” That means bigger and better amenities, and resort style living, she said.

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She also sees the downtown Fort Myers waterfront area as the place to build and doesn’t think putting all her “eggs in one basket” downtown will be harmful. “Location, location, location,” she said. “We love riverfronts. We call it recapturing the riverfront. There is a lot of undervaluing the riverfront, but you have historical integrity, waterfront and a friendly government.” The panelists concluded by addressing how millennials will affect the building industry. Pentecost said it will be a while before they have the buying power needed in this area. “You have to make $60,000 to buy a house,” he began. “That is what it takes to buy at $200,000 house. Getting out of college making $35,000 or $40,000 it takes a long time to get to $60,000. They just don't have the benefit of getting the salary to that level. We wonder why millennials are not buying homes. It is they have not been out of school for that long, only 5-8 years. They need about 10 years to get to that $60,000 range.” Gadoury predicts that millennials will change the way builders create communities. “Golf communities have always been popular, but that might not always be the popular thing,” he explained. “You are just going to build a different type of place with different activities.” Jenkins predicts that wealthier millennials will still be buying luxury homes, but they might also have different criteria when making that selection. “Millennials may not be looking for the 8,000 square foot house,” he said. “They might be looking for more open space and more modern living. They will be building the high end as long as we can find the land to build that high end.” (http://www.news-press.com/story/marketplace/real-estate/2017/06/11/local-real-estate-forecast/375082001/)